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MEYER v. W. R. GRACE & CO.

October 29, 1976

MICHAEL P. MEYER
v.
W. R. GRACE & COMPANY



The opinion of the court was delivered by: BECHTLE

 BECHTLE, J.

 Plaintiff commenced this diversity action against W. R. Grace & Company ("Grace") to recover damages resulting from an alleged breach of an employment contract. Specifically, plaintiff asserted that Grace failed to pay him an incentive bonus, as well as certain raises, educational benefits, severance benefits and equipment commissions, in accordance with his employment contract. The case proceeded to trial and, at the close of the plaintiff's case, the parties settled the claim for equipment commissions and the Court directed a verdict for Grace on the remaining claims, except the claim for an incentive bonus. With respect to that claim, the jury awarded plaintiff damages in the sum of $8,829.34. Presently before the Court is plaintiff's motion for a new trial and Grace's motions for judgment notwithstanding the verdict or, in the alternative, for a new trial.

 Viewing the evidence in the light most favorable to plaintiff, the following facts were developed at trial. From approximately September, 1966, to July, 1972, plaintiff was employed as a salesman by the Cryovac Division of Grace. Beginning in the Spring of 1972, plaintiff had a series of meetings with representatives of the Kennesaw Plastics Division of Grace, concerning the possibility of his transferring from Cryovac to Kennesaw. Ultimately, plaintiff decided to transfer and, on May 31, 1972, Theodore Birdsall, Kennesaw's general sales manager, sent plaintiff a letter which set forth in detail the terms under which plaintiff would be employed by Kennesaw. Plaintiff accepted Kennesaw's offer by signing a copy of the letter and returning it to Mr. Birdsall. The agreement, as contained in the letter, provides in relevant part that:

 
f. Our incentive program for 1973 has not been determined. I can advise you there will be an attractive incentive program offered for 1973 -- though no details have been developed as of this date.

 The agreement also contained a clause which provided:

 
The above constitutes our agreement re finances in total. There are no other agreements express or implied.

 Plaintiff worked for Kennesaw from approximately August 1, 1972, until October 15, 1973. To date, plaintiff has not received any incentive bonus from Kennesaw.

 The Pennsylvania parol evidence rule, *fn2" as succinctly stated in Gianni v. Russell & Co., 281 Pa. 320, 323, 126 A. 791, 792 (1924), provides:

 
"'Where parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only, evidence of their agreement': Martin v. Berens, 67 Pa. 459, 463; Irvin v. Irvin, 142 Pa. 271, 287, 21 A. 816. 'All preliminary negotiations, conversations and verbal agreements are merged in and superseded by the subsequent written contract . . . and unless fraud, accident or mistake be averred, the writing constitutes the agreement between the parties, and its terms cannot be added to nor subtracted from by parol evidence': Union Storage Co. v. Speck, 194 Pa. 126, 133, 45 A. 48; Vito v. Birkel, 209 Pa. 206, 208, 58 A. 127."

 See Manley v. Manley, 238 Pa. Super. 296, 357 A.2d 641, 644 (1976). Furthermore, if an agreement contains an integration or merger clause, then the parol evidence rule is "particularly applicable." National Cash Register Co. v. Modern Transfer Co., 224 Pa.Super. 138, 144, 302 A.2d 486, 489 (1973). See Edwin J. Schoettle Co. Appeal, 390 Pa. 365, 134 A.2d 908 (1957); Pisiechko v. Diaddorio, 230 Pa.Super. 295, 326 A.2d 608 (1974). However, if language used in the contract is ambiguous, the parol evidence rule does not bar the admission of oral testimony which clarifies or explains the ambiguous language. Trapuzzano v. Lorish, 467 Pa. 27, 354 A.2d 534, 536 (1976); Keystone Aeronautics Corp. v. R. J. Enstrom Corp., 499 F.2d 146, 150 (3d Cir. 1974). See Restatement of Contracts § 238 (1932).

 The question presented, therefore, is whether or not the language of the incentive bonus clause is ambiguous. At trial, we held that the language was ambiguous and, accordingly, allowed plaintiff to introduce "parol" evidence to aid the jury in its interpretation of the clause. Upon reexamination of that clause, the Court believes that its ruling was a correct one. *fn3"

 As previously quoted, the incentive bonus clause provides that "our incentive program for 1973 has not been determined. I can advise you there will be an attractive incentive program offered for 1973 -- though no details have been developed as of this date." To be sure, the incentive clause states that the details of the incentive program had not been worked out as of the date of contracting. Nevertheless, the language is clear that there would in fact be an incentive program and that, notwithstanding the fact that the exact details had not been determined, plaintiff would participate in the intended program in 1973. However, it was unclear as to exactly what the parties meant by an "attractive incentive program." In order to aid the jury in its ...


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